Question: Tracer Tech has 100% equity financing and no debt. Its current risk premium is 13.2%. Tracer Tech estimates that a new investment will return 15.5%.

Tracer Tech has 100% equity financing and no debt. Its current risk premium is 13.2%. Tracer Tech estimates that a new investment will return 15.5%. At what range of risk-free rates should Tracer accept the project? Accept if risk-free rate 15.5% Accept if risk-free rate > 2,3%

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